By Tiernan Ray

Shares of Sprint-Nextel (S) today attract opposing viewpoints after the company and Japan’s Softbank (9984JP) yesterday announced the formal completion of Softbank’s acquisition of 72% of Sprint, along with taking over Sprint’s broadband wireless partner, Clearwire.

Sprint shares are listed on the New York Stock Exchange Today on a “when issued” basis and will begging regular way trading tomorrow under the same ticker as before.

Deutsche Bank‘s Brett Feldman today reinstitutes coverage of the combined Sprint/Clearwire with a Buy rating and an $8 price target, calling it “the new king of spectrum with more bandwidth available for LTE than all of its national competitors combined”:

we believe Sprint will grow EBITDA at least 3x faster than its peers over the next 3 years, even if we do not factor in merger synergies or improved revenue trends. NT trends will likely remain soft as Sprint focuses on its LTE build-out and merger integration. But, with over 30% potential upside in the stock, we believe investors should build positions now.

Feldman notes the vast electromagnetic leases Sprint has in U.S. airwaves, having not only the most spectrum of any carrier in the States but also desirable frequencies that suit the evolving nature of the “long-term evolution,” or LTE, fourth-generation networks that Sprint, Verizon Communications (VZ), AT&T (T) and T-Mobile USA (TMUS) are building:

In Figure 3, we show not just the quantity, but also the composition of the spectrum that is free-and-clear to support LTE at the Big 4 carriers and DISH. In our view, Sprint stacks up well on both measures. In addition to having the most spectrum for LTE, it has the largest holdings of high frequency spectrum. Historically, higher frequency bands, such as Sprint’s 2.5 GHz licenses, have been viewed as less attractive due to their limited propagation characteristics, which made them inefficient for establishing wireless coverage. In other words, as the major carriers focused on establishing coverage over the last 10-15 years, they placed a premium on lower frequency bands because they enabled them to create the most coverage with the fewest number of cell sites (and therefore less capex and lower recurring site maintenance expense). Looking ahead, we expect all operators to deploy much denser cell site configurations in order to deliver higher data speeds. So, the goal is to add cell sites, not limit them. As networks densify, we believe that higher frequency bands will be viewed as increasingly valuable specifically because they do not propagate too far thereby enabling carriers to place their sites closer together without creating interference. Another interesting feature of Sprint’s 2.5 GHz licenses is that they are not paired meaning certain portions have not been designated by the FCC for downlink and uplink signals. This enables Sprint to deploy TDD LTE technology in these bands, as opposed to the more common FDD version. Unlike FDD, which is deployed in paired spectrum bands, TDD does not limit uplink and downlink signals to pre-allocated portions of a carrier’s spectrum. Instead, it dynamically uses as much uplink or downlink capacity as needed. Currently, downlink signals use far more capacity than uplink signals. This makes FDD/paired spectrum inefficient as this solution provides identical capacity to both uplink and downlink traffic.

On the other hand, Citigroup‘s Michael Rollins today cut the stock to Neutral from Buy, even though he raised his price target to $7.50 from $6.50, with a note titled “‘Til Debt Do Us Part.”

According to Rollins, investors should be concerned about net debt approaching $29 billion as Sprint takes on substantial capital expenditures:

Sprint’s acquisition of Clearwire coupled with a turbo-charged pace of network investment is elevating the company’s firm value multiple to almost 8x our 2014 OIBDA estimate, which may limit the level of upside potential for Sprint shares over the next 12 months. While our 2014 OIBDA estimate for Sprint is relatively unchanged since SoftBank’s announced plan to take control of Sprint, the accelerated pace of investments, including the acquisition of Clearwire and other wireless assets, should inflate net debt by ~$11 billion, or by 1.5x 2014E OIBDA, to roughly $29 billion, by our estimates. We believe the level of net debt is meaningfully higher than what the market may be incorporating into the share price partly based on: 1) the change in merger terms that reallocated roughly $3 billion of cash proceeds to public investors, rather than representing a direct investment into Sprint; and 2) an accelerated capital spending program that is roughly $7 billion over our previously estimated capex forecasts for 2013 and 2014.

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JULY 25, 2013 2:43 A.M.

Jonathan Kelly wrote:

Spint (NYSE: S) is a great buy! The SoftBank billionaire Masayoshi Son is no dummy, On Forbes richest list 99th, up from 127th last year, The Softbank network in Tokyo is 30-40% faster than all current US carriers, I hope they can share some light on Sprint; With the addition to billions in expansion money; stock analyst target price at $9 a share is modest. 2014 will be Sprints year, and If Softbank can combine networks with Sprint it will be the world's largest network. Sprint may not return to $60 a share (1999) but could easily reach $20 in the next 6 years.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.